Applications for US jobless aid rise, but levels still low

It turns out that initial unemployment claims rose more than expected in the last week of January 2015. “It looks like the labor market has scaled back its rapid advance last month”, said Chris Rupkey, chief economist at MUFG Union Bank in NY. Last week’s claims were revised to show 1,000 fewer applications received than previously reported.

In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending January 29 increased by 8,000 to a seasonally adjusted 285,000 from the previous week’s total of 277,000.

The four-week moving average, which helps to smooth weekly volatility, increased by 2,000 to 284,750. Economists forecasted that claims would reach 280,000. The report suggests the labor market continues to expand – a level below 300,000 claims is historically low – though it also hints at a slower expansion for employers. At the same time, a stock market rout sparked by fears of a global economic slump has caused financial conditions to tighten.

Federal Reserve policy makers, who left the benchmark rate unchanged last month after raising it from zero in December, said labor market conditions have improved further.

Some economists downplayed the increase in layoffs, citing the ongoing job losses in the energy industry and the impact of a blizzard that buried the northeastern United States in late January. There could be even more pressure to come on the USA job market.

The number of people continuing to receive jobless benefits fell by 18,000 to 2.26 million in the week ended January 23. The economy grew only about 0.7% during the 2015 final quarter, as it was held down by headwinds of a stronger dollar and the faltering world demand.

Meanwhile, U.S. stock futures pointed to a lower open.